CRA Travel News
BY Becky Pokora
Most travelers know to be wary of potential scams while traveling, but not everyone realizes you can be scammed before you even leave home.
Even with travel at a near standstill, travel scams are just as prevalent as ever. The Federal Trade Commission (FTC) has received over 5,000 travel-related consumer fraud complaints tied to COVID-19 totaling over $8 million dollars in losses. Travel losses add up to more than the next four categories of fraud combined. Scammers are finding new opportunities to swindle consumers as they let their guard down to deal with the stress of everyday life.
Scammers Posing as Airline Agents
Marci Haussler Peace was one of those nearly swindled recently. She and her husband wanted to cancel a summer flight to Europe since it looked like the trip would be severely restricted, if they could travel at all. After asking her husband to google the phone number to United Airlines, she made a call, shared her reservation details and had a conversation with someone who explained she was eligible for a future travel credit but not a cash refund. They declined the credit and kept the reservation as is.
The whole thing felt normal until Peace discovered her reservation was cancelled the next day—and the electronic travel certificates were issued to a stranger instead of her. As it turns out, the “agent” she spoke with on the phone didn’t work for the airline at all. This imposter had a carefully-arranged scheme, including a fake number for United Airlines that showed up in Google search results, all so he could impersonate a phone agent and steal reservation information.
Thankfully, Peace caught the issue immediately and was able to reach out to United Airlines, this time by verifying the phone number directly on United’s website. The stolen certificates were voided and Peace’s reservation was reinstated with its full value intact.
This scam is a crime of opportunity. Now that some airlines issue travel credits that can be used by anyone as a way to provide extra booking flexibility. Previously, flight credits were attached to an individual traveler’s name and couldn’t be shared. With the name requirement dropped, scammers are stealing these credits to resell for cash. Either way, your ticket numbers, confirmation codes and vouchers should be safeguarded the same way as cash.
To avoid this type of scam, always double check that you are getting contact information directly from the business website rather than using results from a search engine or numbers in an email, which may also be fake.
More commonly, though, it’s scammers that reach out to you rather than the other way around. Unsolicited phone calls are often a phishing attempt, claiming you’re eligible for a refund but they need your credit card information to process the refund. Scammers urge you to share your financial details before you have a chance to verify what’s happening. Next thing you know, they’ve stolen your card.
Especially now while everyone’s distracted by other things, constant vigilance is key. If someone asks you to provide your credit card or other personal information (like a social security number), that should sound an alarm. Don’t share this type of information by phone or online unless you’re positive you’re dealing directly with the company and it’s necessary for your purchase or refund.
Fake Travel Insurance Policies
There’s growing pent-up demand for travel, but consumers still want to protect themselves. Future travel restrictions are unpredictable and it’s likely that more travelers will shop around for insurance during the planning stage, whether or not they ultimately buy a policy. However, most standard policies don’t cover trip cancellations due to the coronavirus outbreak.
To purchase a policy that refunds your expenses on a trip due to fear of the coronavirus, government-imposed travel bans, or even an airline or other travel supplier cancelling a portion of your trip, you need to purchase a plan with a Cancel for Any Reason upgrade. These upgrades are expensive add-ons. Furthermore, they can only be purchased within two or three weeks of initially booking your trip.
Preying on traveler fears, scammers are currently selling bogus COVID-19 travel protection. They pitch cancel for any reason coverage at no extra cost rather than the hundreds of dollars it normally costs, which should raise a red flag. Later, buyers are left in a lurch when they realize they don’t have the protection they expected.
When you’re shopping for travel insurance, make sure you’re buying a policy directly from a licensed company so you don’t get caught up in a scam. Learn more about coronavirus and travel insurance and always read the policy fine print in advance so you understand what you’re buying.
Disappearing Timeshare Resellers
One of the scams that Sorin Mihailovici, founder of the Scam Detector database, noticed an uptick in is timeshare resales. It’s not surprising, as timeshare owners try to sell prepaid weeks of vacation (or full contracts) they can’t use anymore.
The scam works this way: “You post an ad online, looking for a buyer and later receive a call or email from a company that deals with timeshare resales,” Mihailovici says. The caller claims they have a client interested in purchasing your timeshare and they’ll help with the transfer paperwork for an “upfront fee of a few hundred dollars.”
I’m sure you can guess what happens next. After paying, the caller disappears with your money and disconnects their phone number. Then, the timeshare owner is left with a vacation they can’t use and a fee they can’t recoup.
Since there are legitimate services that help re-sell timeshares, this is a case where it’s best to trust your instincts. Does the call make you skeptical? Can you verify the seller is who they say they are? Often, the best way to discern whether it’s a scam is if it feels rushed or urgent. Scammers don’t like to give you time to think things through. This is especially true if someone is asking for payment in cash, gift card, or other untraceable methods.
Vacation Rental Cons
Con artists have been luring travelers into false reservations under the pretense of savings for years, but as personal finances get tighter, the temptation to give in to a seemingly great deal might be stronger.
The scam begins when you inquire about a rental property at the destination of your choice. The owner gets back to you, offering you a discount on your reservation if you agree to wire payment for your stay instead of booking online. In theory this is a win-win. The owner saves on a booking commission, and passes on some of those savings to you in the form of a discount. Once you wire the money, the owner and the listing disappear and there’s no way to get your money back.
You can lower your risk by booking through reputable vacation rental sites that have consumer protections, cancellation policies and insurance guarantees. Make any deposits or other upfront payments with a credit card through their booking website, which gives you both the booking platform and the credit card itself as fallbacks to help you if something goes wrong.
Booking through a reputable site can also help even if you’re not victim to a scam. For example, as part of their COVID-19 response, Airbnb offered full refunds to guests with pre-existing reservations, no questions asked.
What to Do if You’ve Been Scammed
While prevention is the best course of action against scams, some schemes are so elaborate that it’s easy to fall victim.
If you’ve been scammed or have information about an illegitimate company or scammer in the United States, report it to the Federal Trade Commission. International scams can be reported through a partnership of more than 35 consumer protection agencies around the world.
If you’ve lost money as a result of the scam and paid for fake products or fraudulent fees with a credit card, contact your bank. Some charges may be refunded as part of your credit card’s consumer protections. Even if they’re not, you can have credit cards reissued with new account numbers to protect you from further charges.
Many people are at their most vulnerable now, overwhelmed with stress and financial hardship. It’s all too easy to let your guard down and that’s exactly what scammers are preying on. Keep your vigilance up and remember—if it sounds too good to be true, it probably is.
Credit to Forbes.